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Klarna Shares Dive 25% as 2025 Net Loss Shocks Analysts

Jack KelloggAvatar
Written by Jack Kellogg Reviewed by Ellis Hobbs Fact-checked by Matt Monaco
Updated 2/20/2026, 4:29 pm ET 2/20/2026, 4:29 pm ET | 5 min 5 min read
Klarna Shares Dive 25% as 2025 Net Loss Shocks Analysts Thumbnail

Klarna Group plc’s stocks have been trading down by -5.2 percent following reports of heightened competition and financial scrutiny.

Finance industry expert:

Analyst sentiment – negative

Klarna (KLAR) currently holds a challenging market position with a set of financials that raise concerns about its performance trajectory. With $2.8 billion in revenue and an enterprise value of nearly $3.8 billion, Klarna’s price-to-sales ratio of 4.85 and price-to-book ratio of 5.83 indicate a potentially overvalued stock compared to its tangible book value multiple of 10.85. The company’s return on equity and return on assets are at a concerning zero, reflecting inefficiencies that could be detrimental in sustaining competitiveness. Additionally, with a high leverage ratio of 8.2, Klarna faces significant financial risk, exacerbated by its substantial retained earnings deficit of $2.283 billion, which casts a shadow on its ability to fund future operations organically.

Klarna’s technical analysis suggests a predominantly bearish trend over the observed period. Recent trading showcases considerable volatility, with a sharp decline from $19.69 to $13.12, highlighting a downward pattern exacerbated by a massive loss following negative financial performance announcements. The notable volume spike on February 19, coinciding with the stock decline, indicates strong selling pressure. Support appears weak, with the breach of $13 signaling further potential downside. Traders should consider short positions, targeting further support levels near $12, ensuring to monitor any diminishing bearish indicators or reversal patterns that may arise.

Recent news compounds Klarna’s challenging outlook, with reports of a significant net loss prompting a 25% stock price decline. The company finds itself embroiled in class action lawsuits stemming from alleged misleading disclosures about its loss reserves post-IPO. Klarna’s performance notably lags behind industry benchmarks within the Finance and Diversified Financial Services sectors, which are anticipated to manage volatility and regulatory challenges more robustly. Given the legal issues and financial results, resistance levels are firm near $15, with potential downside risks threatening further declines unless corrective measures are swiftly implemented. Judging by these indicators, my sentiment is decidedly negative.

Candlestick Chart

Weekly Update Feb 16 – Feb 20, 2026: On Friday, February 20, 2026 Klarna Group plc stock [NYSE: KLAR] is trending down by -5.2%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Financial Overview

Klarna’s recent financial disclosures reveal significant challenges, marked notably by a severe shift from profitability to a net loss. With revenues of $2.81B, the financial strains become more pronounced considering a weak market response. Despite encountering an enterprise value surpassing $3.79B, declining stock prices reflect thwarting investor confidence amidst mounting concerns. The disparities between revenue and expected performance are raising alarms, evident in the price-to-sales ratio at 4.85 and a price-to-book ratio of 5.83, suggesting potential overvaluation amid distress signals.

More Breaking News

Trading in recent days exhibited instability. Starting at $19.93, shares drifted downward, hitting a low of $13.08, indicative of investor apprehension and reactive trading. Metrics amalgamate a turbulent market narrative, where volatile intraday patterns stress the immediate need for strategic recalibration by Klarna’s leadership. As it confronts these complications, both from financial missteps and legal challenges, analyst scrutiny and investor sentiment point towards a precarious trajectory for the company.

Conclusion

In recent market history, Klarna’s fiscal performance and strategic stance illustrate a cautionary tale for fintech players aiming at aggressive market penetration without a robust risk management framework. As millionaire penny stock trader and teacher Tim Sykes, says, “There is always another play around the corner; don’t chase just because you feel FOMO.” As the fallout unfolds, it puts a spotlight on the accountability of technological entities under increased regulatory and trader scrutiny. The path forward will demand recalibrated risk assessments, transparency in financial disclosures, and potentially prudent operational adjustments to restore market faith. As stakeholders digest these dynamics, Klarna’s journey underscores the ever-critical balance of ambition against sustainable business conduct, reminding market players of the volatility inherent in this fast-evolving domain.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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Jack Kellogg

He teaches webinars on Tim Sykes’ Trading Challenge He became Tim’s youngest millionaire student in 2020. Now he’s second on the Trading Challenge leaderboard with $12.9 million in career earnings. He’s a master of the 7-Step Pennystocking Framework. Jack is one of a rare breed of traders to profitably trade the entire penny stock framework.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”